Pressure is easing on the chronically strained semiconductor market as analyst firm Gartner forecasts 13.6 per cent growth to US$676 billion for the end of 2022.
Burdened by chip shortages and supply chain issues, the semiconductor market is expected to return to a semblance of balance throughout the rest of the year.
Indeed, Gartner research vice president Alan Priestley claimed that both semiconductor supplies and prices are are expected to ease by the end of the year.
“The semiconductor average selling price (ASP) hike from the chip shortage continues to be a key driver for growth in the global semiconductor market in 2022, but overall semiconductor component supply constraints are expected to gradually ease through 2022 and prices will stabilise with the improving inventory situation,” he said.
The slowdown in growth for PCs, smartphones and server end markets is then expected to, in turn, gradually slow down the growth of semiconductor revenue, the firm said, due to semiconductor supply and demand being expected to come back into balance.
The memory sector in particular is anticipated to remain as the largest semiconductor market, making up 31.4 per cent of the overall market in 2022. DRAM and NAND will be in undersupply during the second quarter of the year, with NAND entering oversupply in the fourth quarter while DRAM will have to wait until the second half of 2023.
“The combination of megabyte shipments and higher annual average ASPs this year will sustain revenue growth for both markets in 2022, with projected growth of 22.8 per cent for DRAM and 38.1 per cent growth for NAND,” Gartner said.
Smartphone semiconductor revenue is forecast to rise by 15.2 per cent in 2022, with 5G smartphone unit production expected to grow by 43.5 per cent during the year to reach 80 million units, or 55 per cent of all smartphones.
In fact, 5G smartphones are expected to see price drops due to rising 5G-integrated baseband integrated circuits (IC) inventory.
The shift to 5G has resulted in a shortage of 4G system-on-chip integrated baseband ICs, which started in the second half of last year.
Meanwhile, automotive applications will continue to face constraints from this year through to 2023.
“Although unit production of automotive vehicles will grow below expectation at 12.5 per cent in 2022, semiconductor device ASPs are expected to remain high due to continued tight supply driving the automotive semiconductor market to double-digit growth (19 per cent) in 2022,” said Priestley.
“Automotive HPC, EV/HEV and advanced driver assistance systems will lead the growth in automotive electronics sectors through the forecast period.”
According to fellow research firm IDC, automotive ICs in particular are being held back by issues with mature process nodes, which is also affecting LCD drivers, power management ICs and microcontrollers.